Section 8 Fair Market Rent (FMR) for ZIP 94578 - 2027

Investment Score for ZIP 94578

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,990
1 Bedroom	$2,180
2 Bedrooms	$2,670
3 Bedrooms	$3,420
4 Bedrooms	$4,050
5 Bedrooms	$4,698
6 Bedrooms	$5,262
7 Bedrooms	$5,683
8 Bedrooms	$5,967

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$2,180	$398,611	0.55%	F
2BR	$2,670	$650,634	0.41%	F
3BR	$3,420	$817,563	0.42%	F
4BR	$4,050	$946,344	0.43%	F
5BR	$4,698	$1,033,549	0.45%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 94578 (San Leandro, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 94578, as set by HUD for 2026, is $2710 for a two-bedroom apartment. This amount represents 34.6% of the median household income of $94,084. However, the actual rental market in San Leandro is significantly higher. The Zillow median price for a two-bedroom apartment is $654,058, which translates into a monthly rent of approximately $2725 based on typical mortgage payments and property taxes. Given that the price-to-FMR ratio is 20.1x, it is clear that the actual rents far exceed the FMR, creating significant constraints for voucher holders. They would likely struggle to find suitable housing within their budget, as landlords might be reluctant to accept vouchers due to the high disparity between FMR and market rates. #### Affordability & Renter Profile San Leandro has a population of 41,769, with 55.9% of residents being renters. This indicates a strong demand for rental properties. The occupancy rate stands at 94.8%, suggesting a tight rental market where most units are occupied. The median household income of $94,084 is relatively high compared to the national average, but the high cost of living in the Bay Area means that many residents still face affordability challenges. The median rent for a two-bedroom unit at $2725 is a substantial portion of the median income, making it difficult for lower-income households to afford housing without assistance. The high price-to-FMR ratio further exacerbates this issue, indicating that the market is very tight and potentially overpriced relative to what HUD considers fair. #### Investor Angle From an investor perspective, the ZIP code 94578 presents both opportunities and challenges. The FMR for a two-bedroom unit is $2710, while the actual market rent is around $2725. This suggests that the market rent is slightly above the FMR, which could indicate a potential for cash flow if the investor can secure tenants who do not rely solely on vouchers. However, given the high price-to-FMR ratio, the likelihood of finding tenants willing to pay the full market rent is low unless they have additional sources of income beyond the voucher. In terms of investment grade, the ZIP code appears to be risky for Section 8-focused investors. The high disparity between FMR and market rent means that landlords who accept vouchers will likely be underpaid relative to market conditions. Additionally, the tight rental market and high occupancy rate suggest that there is limited room for growth in the number of available rental units, which could impact long-term investment returns. #### Specific Actionable Insights 1. **Targeting Non-Voucher Tenants**: Investors should consider targeting tenants who can supplement their Section 8 voucher with additional income. For instance, a tenant with a combined income of $120,000 could afford a two-bedroom unit at $2725 per month, which is the market rent. This strategy would help mitigate the risk associated with relying solely on voucher payments. 2. **Diversification of Rental Units**: Given the high price-to-FMR ratio, investors might want to diversify their portfolio by including units with different bedroom counts. For example, a one-bedroom unit with an FMR of $2220 might be easier to fill with voucher holders, while also considering the higher FMR for three-bedroom units ($3470) to cater to larger families who might have more financial flexibility. 3. **Improving Property Value**: Investors should focus on improving the value of their properties through renovations and upgrades. This could help justify higher rents and make the properties more attractive to non-voucher tenants. For instance, upgrading a kitchen or bathroom could add significant value and appeal to tenants willing to pay above the FMR. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market in San Leandro, the recommendation for Section 8-focused investors is to **Skip** this ZIP code. The risk of underpayment relative to market conditions is too high, and the challenge of finding suitable tenants who can supplement their voucher income is significant. Instead, investors might want to explore other areas within Alameda County or neighboring counties where the price-to-FMR ratio is lower and the market is less constrained.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). Demographics from U.S. Census (2024).

About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.